The ties between Facebook and Wealthfront date back to the earliest days of our service. Facebook employees and executives were some of our earliest adopters, as well as advocates, and they played a critical role in helping us attract more than $1 billion under management in less than 2 ½ years. In retrospect, it shouldn’t be a surprise that one of the industry’s greatest engineering cultures would favor an automated investment service.
In recognition of our deep history, we’re excited to announce a feature we wish we had for Facebook employees, ex-employees and investors back in 2012 when Facebook went public — Selling Plan.
The Facebook Equity Culture
Facebook’s success quickly made the company one of the titans in the industry, and has generated remarkable wealth for its employees. Facebook has even distinguished itself in Silicon Valley for its progressive attitude towards sharing its equity with the employees who help design, build and maintain its service. At the time of its IPO in May 2012, over 13% of Facebook’s equity was allocated to non-executive employees. At today’s market capitalization of over $160 billion, we estimate that Facebook has placed over $20.8 billion in the hands of its non-executive employees.
Thousands of Facebook employees now face a fairly complex and unusual financial issue. Most of their net worth is tied to a single, volatile technology stock. And while most reasonable people understand the advantages of a low-cost, diversified and tax-efficient portfolio, they are often paralyzed by the set of decisions they need to make in order to get from their current situation to a more balanced financial profile.
Many of us at Wealthfront have experienced these same frustrations and that’s why we built Selling Plan. We timed the initial rollout for Twitter employees, making it available in April as their post-IPO lockup expired. Since then, the overwhelming feedback from our Selling Plan clients has been extremely positive about the benefits of automating the daily sale of their shares. Now that we’ve built over $230M in plans for Twitter shareholders, we’re thrilled to be able to offer it to our Facebook clients.
Enter Selling Plan
Senior executives benefit from the opportunity to participate in 10b5-1 plans to simplify and automate their stock selling. Wealthfront does not provide a formal 10b5-1 plan, but our Selling Plan provides the same level of automation and convenience for everyone else.
Selling Plan lets you:
- Visualize your vested and unvested equity compensation, including your restricted stock units and stock options.
- Build a plan to sell your stock in an easy, commission-free, and tax-aware manner
- Sell your Facebook stock gradually and consistently, trading as often as every day with institution-level execution
- Minimize taxes due on every stock sale and set aside enough cash to cover your future tax bill
- Invest your after-tax proceeds in a less-volatile Wealthfront diversified portfolio that is suitable for your long-term needs
Once your plan is in place, Wealthfront automatically sells a portion of your equity every day, commission-free during open trading windows. In fact, Wealthfront uses volume-weighted average price (VWAP) to help get clients institution-level trade execution. Wealthfront is even smart enough to know when you are allowed to sell your stock, consistent with your specific blackout window.
The Perfect Time to Get Started
Facebook employees are currently prohibited from trading their stock due to their blackout window. That blackout window expires on July 25th, making this the perfect time to get started. The blackout window does not prevent you from signing up with Wealthfront and transferring your stock to the new service. In fact, the sooner you begin the process, the sooner you’ll be able to begin trading.
We’re extremely excited to be able to offer this service to the Facebook team. It’s just one more great step we get to take together on our path towards building a successful financial future. If you would like to see Selling Plan offered at your company, sign up here and stay tuned for additional availability.
Join us on the journey.